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AnchorDesk

David Coursey
The REAL reason RealNames is going poof

David Coursey
Executive Editor, AnchorDesk
Tuesday, May 14, 2002
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It's amazing how many different ways people can find to avoid saying, "We screwed up." I was reminded of this recently when I visited the Web site of a guy named Keith Teare.

Until a few days ago, Teare was CEO of a company called RealNames. The company's product was an alternative Internet naming system under which users could navigate the Web by typing simple keywords (such as "AnchorDesk") into their browsers instead of complicated URLs ("www.anchordesk.com").

It was a good idea--but good ideas don't always make good businesses. In fact, the company doors will likely shut for good in a month or two. Why? Teare blames Microsoft. I disagree. Microsoft may have put the final nail in the coffin. But what really killed RealNames was a bad business model.

THAT MODEL was pretty straightforward: Owners of URLs would pay RealNames for the rights to keywords (at $500 a year each). RealNames would then pay Microsoft to enable that keyword-to-URL translation in Internet Explorer.

It's the last part that's got RealNames in trouble. Earlier this year Microsoft refused to renew the RealNames contract. On May 10, Teare and 79 others were laid-off. After the contract expires on June 28, RealNames would seem to be real dead.

On his Web site, Teare first establishes that he's no Microsoft-basher (there's even a picture of him with MS CEO Steve Ballmer). But then he proceeds to blame Microsoft for his company's demise. And he makes the case--bolstered by a number of documents--that Microsoft should have allowed RealNames to stay in business, even if his company owed Steve's millions of dollars.

I'll say again what I've maintained throughout RealNames's five years of existence: It was a bad business idea. But don't take my word for it. Keith Teare's own numbers make it absolutely clear that RealNames was no gold mine, and that it was completely dependent on Microsoft for what revenue it had.

THE FACT OF THE MATTER is that, instead of making surfing more convenient, RealNames made it more confusing. Type "Pepsi" into the address bar in IE and you'll go to the Pepsi Web site, with a RealNames banner at the top of the window. Type in "Dr Pepper" or "AnchorDesk," and you'll go to the corresponding sites without the banner to tell you how you got there. Type in "Ford Motor," and you'll get a standard MSN search result.

To be useful, RealNames had to be consistent and, to do that, it had to be nearly ubiquitous--nearly every logical keyword had to produce a useful result. But instead, I've run across RealNames-enabled sites so infrequently lately, I wasn't really sure the company was still in business.

Still, it's sad when a company dies, especially one that had been around for a while and had apparently weathered the worst of the dot-com meltdown. Don't get me wrong: I think Teare deserves credit for keeping the company alive as long as he did. He's a gold-star visionary in my book, regardless of this failure.

But at some point, you have to offer a service people are willing to use and customers are willing to pay for. Failing to do that is what killed RealNames, not anything Microsoft did or didn't do.

What do you think? Did you ever use the RealNames service? Who's to blame for its demise? Microsoft? Or RealNames itself? TalkBack to me!

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